HealthCareForAmericaNow

National Journal's Health Care Experts blog has a discussion going on Obama's public plan. James Gelfand from the Chamber of Commerce led off:

I don’t think anyone is 100 percent positive what kind of effects or market distortions a new government health plan would bring about, but here is what we know for sure:

(1) The plan would be modeled after Medicare. Medicare is in dire financial straights. Listing the problems with Medicare would take a lot of space – but the question is, will Medicare be modernized and improved? Will the new plan include cost-saving efficiencies, or would it just be more of the same?

(2) The plan might have undue market advantages. Government is always able to “negotiate” the lowest rates – after all, they have the guns, the money, and the regulating authority. How much below market rates will the government plan pay – as bad as Medicare or Medicaid? Will the plan have to advertise at all? Probably not. This will make the government plan artificially cheaper than the other plans.

(3) Private plans might be too strangled to compete. The proposal to create a new Medicare-like plan is always coupled with strict regulations for private plans – they must accept all comers, charge similar rates to the sick and the healthy, young and old. They must cover a long list of specific drugs, services, and conditions. Are we, in essence, forcing the private plans to be the same as the public plan? And then artificially lowering the costs of the public plan? That kind of competition would not bode well.

Would a new public plan be the beginning of the end for private plans? Would this be creating a massive new debt to pass on to our grandchildren? Both of these questions will need very clear answers before many will support such a plan.

Fortunately, a lot of James's questions have already been answered. Here's my response:

Mr. Gelfand raises good questions that deserved to be answered.

Indeed, some of the answers are already apparent.

(1) Medicare is indeed in dire financial straights, because it operates outside the normal logic of insurance. In an insurance system, risk is spread over a large pool of people. In a good insurance system, those who are less at risk still pay into the system, in effect subsidizing those who are more at risk. Because Medicare is only available to Americans over the age of 65, it functions against this logic. It should come as a surprise to nobody that health care for older Americans is more expensive than health care for younger Americans. With no younger, healthier people in the Medicare system, risk is concentrated and costs rise. This ends up being a subsidy for private health insurance, which can make money insuring less costly, younger Americans, then dump them onto the public dole when they reach the age of 65. The solution for eliminating this subsidy and rising Medicare costs is to allow a public insurance plan to cover everyone, fairly sharing the risk.

(2) and (3) Senator Max Baucus (D-MT), one of the leaders in Congress taking charge of Obama's health care vision, specifically addressed this point in a letter to the editor of the Wall Street Journal last week.

According to Senator Baucus:

"[the public plan] will require affordability, but premiums will not be set. It will require a minimum level of benefits, but Congress will not prescribe specific packages or even require insurers to participate . . . The public option would not "offer generous packages . . . no private company could ever afford or justify." The Baucus plan specifically says a public option must offer benefits similar to private plans in the Exchange. Nor does the Baucus plan import Medicare's price rules into the public option. Rates would be determined by balancing the goals of increased competition and affordable access to quality health care.

Put simply, Barack Obama's vision for health care reform would force all players in the health insurance system - private and public - to play by the same set of fair rules. There would be no special advantages given to a public health plan, it would simply be created to compete with private insurance on a level playing field. If private insurers truly believe that their product adds value, they should not be afraid of a little competition.

The rest of the responses from the other conservatives, including Senator Mike Enzi (R-Wyoming) and John Goodman of McCain campaign fame, use similar strawmen for their arguments. As Senator Baucus made clear, a public health plan would compete on a level playing field with private insurance. There would be no unfair advantage. And as any one of our single-payer friends will tell you, Obama's plan is not single-payer health care.

Still, conservatives throw out the big-government boogeyman at every chance, because it's the only argument they have. Too bad it's not true this time around, and the public know it.

On a personal note, I was friends with James Gelfand in college, and I remember having many debates with him over politics. It's interesting that we find ourselves debating again, this time for real.

It's the old venture capitalist axiom:

Step 1: Sell health insurance to healthy people.

Step 2: Deny them when they get sick.

Step 3: Profit!

Well, maybe it's a slightly different version of the same old story, but it is the same old story. And AHIP's release of their new health care plan is a just repackaging of the same old story.

The insurance industry has awoken to the fact that nobody likes them. It should come as no surprise when nearly every insured person in America experiences insurers as the people who denied care or services  when they really needed it, including the president-elect of the United States. Now, they have decided  to try to re-market themselves as the reformed good guy, who really wants you to get health care, with just a few *tiny* exceptions:

• When you get a chronic disease
• When you are a woman of child-bearing age
• When you are old
• When you are already sick

Richard Kirsch, HCAN National Campaign Director, summed it up saying, "AHIP’s plan still lets insurers charge higher premiums for older and sicker people and for women. Their proposal pushes high-deductible plans and still lets insurance companies decide whether or not to approve the care your doctor says you need. " Read Richard's full statement.

They plan to stick taxpayers with the bill of the people they don't want to pay for. For example, the health insurance industry’s solution to medical bankruptcy isn’t to give people good health coverage but to have the government bail-out families who go bankrupt because they have lousy health coverage. In his response the AHIP announcment, Richard asks, "How can the health insurance industry propose reform which still lets families go bankrupt and expect to be taken seriously?"

The truth is the health insurance industry tried this before, and it didn't work. They had their chance. We need reasonable regulation of the health insurers and a choice of a public plan that provides quality, affordable care to everyone. They will never reform until they compete on a level playing field that puts people's health first.

When it comes to the AHIP's health care plan, there is only one thing we have to remember:

“We will not sacrifice profitability for membership.”
-  Angela Braly, WellPoint CEO in a conference with investment analysts, April 2008

Today, America's Health Insurance Plans, the health insurance industry front group, released their proposal for health care reform. Here are the main policy points:

• Controlling costs: Health plans are urging Congress to set a bold target of reducing the future growth in health care costs by 30 percent over the next five years.  Based on the current projected growth rate of 6.6 percent, this could produce a cumulative savings of more than $500 billion over five years.
• Helping consumers and purchasers: Health plans propose that a new portable health plan be available to individuals and small businesses in all states.  This affordable "essential benefits plan" would provide coverage for prevention and wellness as well as acute and chronic care.  To maintain affordability, the essential benefits plan would not be subject to varying and conflicting state benefit mandates.
• Achieving universal coverage: Health plans propose guaranteed coverage for people with pre-existing medical conditions in conjunction with an enforceable individual coverage mandate.  To help working families afford coverage, advanceable and refundable tax credits should be available, phasing out as income approaches 400 percent of the federal poverty line.
• Adding value: Health plans commit to streamlining administrative processes and propose making targeted investments in our public health infrastructure.  The plan also calls for refocusing our health care system on keeping people healthy, intervening early, and providing coordinated care for chronic conditions; adopting uniform standards for quality, reporting, and information technology; and investing more in research to better understand which treatments and therapies work best – for the nation as a whole and for specific patients.

Tax credits? Insurance across state lines? More pledges that the industry can self-regulate? A lot of this seems really familiar. A lot of this was part of John McCain's health care plan.

Doesn't the insurance industry realize John McCain was crushed in a large part due to the money Obama spent promoting his health care plan and demonizing McCain's? The fact that one month after a landslide election the insurance industry would come out with a proposal containing large parts of a roundly defeated health care plan show that they are hopelessly out of touch.

Tomorrow, America's Health Insurance Plans, the insurance industry front group, will release "a new comprehensive health care reform proposal that offers solutions to contain rising health care costs, enhance portability, provide affordable coverage options for small businesses, protect against medical bankruptcy, and more."

Now, over here at Health Care for America Now, we're pretty sure what AHIP's plan will include based on their past statements. At online forums around the Democratic and Republican conventions, Karen Ignagni, AHIP's CEO, repeated her support for McCain-style health care reform heavy on tax credits and light on actual solutions to high costs, low enrollment, and high administrative overhead. Then, even though AHIP recently said they would start accepting customers with pre-existing conditions instead of denying them needed insurance, they still steadfastly resist competing on a level playing field with a public insurance plan that is affordable and open to all. (And they say nothing about controlling costs.)

Given that AHIP's plan will likely be long on rhetoric (universal coverage, affordability) and short on actual solutions to any of those problems, we have 10 questions we're hoping members of the media will ask Karen tomorrow morning at the National Press Club in Washington, DC when AHIP presents their plan:

1. Will you continue to charge people more for health coverage based on age, gender, and medical condition, and will you raise rates on business and individuals after they or their employees go through costly medical care or become chronically ill?
2. You say that with universal coverage you will accept everyone, regardless of pre-existing medical conditions. Are there any qualifiers on that?
3. Will you continue to support high-risk pools which transfer the cost of the most expensive people to the public? If so, why are such pools needed if you are accepting all comers?
4. Will you support the federal government requiring that all health care plans include defined health benefits?
5. The Congressional Budget Office has found that Medicare is paying private insurers 13% more than it costs Medicare’s public plan to provide the same benefits. Will you support giving people a choice of public insurance? And if not, why not?
6. Does your plan require you make your rules – the rules you use to decide whether or not to provide care - public and easily understood?
7. Does your plan limit the amount that insurers may spend on administration, marketing, and profit?
8. Insurance premiums have been rising four times faster than wages while health insurance profits rose more than 1000% from 2001 to 2006. Given this, why should we trust you to control health care costs?
9. The average health insurance company CEO earns $8 million. In recent years, the Aetna CEO earned $57 million, the CIGNA CEO earned $42 million, and executives at WellPoint made more than $150 million in gains. Will you agree to limit CEO compensation as part of your health insurance reform proposal?
10. How much of the money you make from health insurance premiums are you spending now or planning to spend on lobbying and other efforts to influence the debate on health care?

We've sent reporters these questions, so they have them on hand. I'll be down at the National Press Club tomorrow, live-blogging and listening to see if the media steps up to the plate, does their job, and questions the industry's spin. It should be a fun morning.

Health Care for America Now held a retreat last week. Via Greg Sargent at TPM:

I'm told that dozens of the heaviest hitters from the health care reform world met for a private retreat in Virginia last week and spent two days girding for a major battle with the insurance industry, hashing out specific messaging, discussing organizing goals and planning a major fundraising drive to blanket the airwaves with ads next year.

At the retreat — which was organized by Health Care For America Now, the major umbrella group of unions, reform advocates and providers — the group agreed that they were aiming to start next year with at least $25 million for ads and field organizing, with the hope of raising many millions more.

Lots of elements of health care reform and how to win were discussed, but one of the most important was taking on the opposition. Specifically, if we want to win health care reform, we have to not only prove the insurance industry and the right-wing of this country wrong, we have to make them untrustworthy.

Case in point, as I wrote yesterday, conservatives and the industry will use all their resources to "kill" health care reform to preserve their own interests:

As this debate moves forward, keep a close eye on who's making arguments. If it's the insurance or pharmaceutical industry, you can bet their argument helps or protects their bottom line. If it's conservatives, you can bet it helps their political viability. Don't ever assume these groups have the public's interest at heart.

Having arguments is one thing, and yes, reasonable people can disagree on issues like health care. But it's important that the general public understand who's pushing arguments like "We can't afford health care in an economic crisis" or "big government health care is not the solution we need" and why they are pushing those arguments. As conservatives are making clear, they aren't against health care for ideological reasons so much as for partisan reasons:

Amidst the usual scary phrases like "government takeover," "Marxist," and "Obamacare" (what does that even mean?), Pethokoukis comes clean about his real problem with health care reform - people will like it and they'll like Obama for making it happen. Michael Cannon of the Cato Institute agrees. His message to Republican lawmakers: Blocking Obama's Health Plan Is Key to the GOP's Survival.

The country needs to understand why the right-wing is against health care reform. You can help make that happen.

SEIU has put together an online letter writing tool for folks to write letters to the editor to their local paper. All you have to do is input your zip code and write a letter and it will be automatically submitted to all the local papers in your area.

So, please take a moment and write a letter to your local papers. Expose the reasons why conservatives oppose health care reform. Make their arguments untrustworthy. That way, we'll be able to win quality, affordable health care for all in 2009.

As the health care debate moves forward, both in Congress and out in the public square, it's going to be important to keep two things in mind.

First, businesses that have an interest in the outcome of health care reform, specifically the prescription drug industry (PhRMA) and the insurance industry (AHIP and others) will argue against any health care reform that threatens their profits. Every single time. Period.

So, whenever you see statements from these industries, or whenever they come out with a "concession," as they did this week saying they would begin covering pre-existing conditions, keep the profit motive in mind. AHIP was shrewd to come out with their new position; they know not covering pre-existing conditions is one of the top reasons the public has such a low opinion of the insurance industry. But they are not actually interested in solving the problem. As Think Progress points out, nothing is mentioned about AHIP helping to control costs (read: lower their rates):

But while the insurance industry has shrewdly co-opted the rhetoric of universal coverage, they have not adopted the necessary affordability measures that progressives typically advocate for. For instance, while most progressives support community rating — everyone pays the same prices for coverage, regardless of health status — and a new health care exchange in which private plans are forced to compete with a public option, the insurance industry would be happy to see the government subsidize coverage for those who can’t afford it.

These costs remain the #1 cause of bankruptcy for Americans, but cutting those costs (by creating a public plan to compete with the insurance industry) would cut into insurance industry profits. And so, the industry continues its single-minded opposition to a public health care plan, because they know they can't compete on the level playing field.

Same goes for conservatives. Their opposition to health care reform will be based on one thing - political survival.

Back in 1992, Bill Kristol distributed a hugely influential memo to conservatives arguing that if Bill Clinton succeeded in passing health care reform, the right-wing in America would suffer a near fatal blow. In Kristol's words, conservatives should seek to "kill," not amend health care reform.

A similar feeling is echoing now through conservative circles, as James Pethokoukis reports in US News:

The GOP strategist had been joking about the upcoming presidential election and giving his humorous assessments of the candidates. Then he suddenly cut out the schtick and got scary serious. "Let me tell you something, if Democrats take the White House and pass a big-government healthcare plan, that's it. Game over. Government will dominate the economy like it does in Europe. Conservatives will spend the rest of their lives trying to turn things around and they will fail."

So, as the "legislative fireworks" start flaring up, keep that in mind. Whenever conservatives oppose health care, it's not because they think it won't work, or because they think it'll be unpopular. It's actually just the opposite. Conservatives will oppose health care reform precisely because it will prove so effective and so popular that they will lose power in this country. Conservatives oppose health care reform for their own political survival. Period. End of story.

As this debate moves forward, keep a close eye on who's making arguments. If it's the insurance or pharmaceutical industry, you can bet their argument helps or protects their bottom line. If it's conservatives, you can bet it helps their political viability. Don't ever assume these groups have the public's interest at heart.

So, guess what you'll be spending nearly 50% of your paycheck on in 2016? It's not food. It's not your mortgage. It's your health care.

According to a New America Foundation report released today, we're in for a tough, expensive road if we don't get down to health care reform immediately:

As health care costs continue to grow faster than wages, health insurance will become more and more unaffordable for more and more American families every day. The financial burdens associated with health care and health insurance will only get worse over time without action.The cost of the average employer-sponsored health insurance plan (ESI) for a family will reach $24,000 in 2016. This represents an 84 percent increase over 2008 premium levels. Under this scenario, we estimate that at least half of American households will need to spend more than 45 percent of their income to buy health insurance.

Another shocking statistic from the report: Last year, the American economy lost $207 billion because of our poor health care system.

You can check out the impact in 2016 on your state here.

A health care reform plan like Obama's is projected to cost between $50 billion (the number given by the Obama campaign) and $75 billion upfront. Obama says he'll finance his plan by rolling back Bush's tax cuts for the rich. And the savings will be huge.

For an investment of ~$70 billion (that's 1/10th of a bailout), we can plug that hole that's draining $207 billion per year from our economy. For 1/10th of the money that we're giving away without oversight to Wall Street, we can make sure working families don't spend half their income on health care costs.

So, quite frankly, anyone who says we can't afford to do health care reform right now isn't worth listening to. They obviously have no idea what they're talking about.

Sean Lengell at the Washington Times gets to the heart of the issue:

The nation's largest pharmaceutical lobbying group is preparing a multimillion-dollar public relations campaign to tout the importance of free-market health care and undercut an expected push by the Obama administration for price controls of prescription drugs.

The effort, which will include a national television commercial scheduled to begin airing next week, is the first salvo in what likely will be a huge battle over health care reform during the Obama presidency.

Other major industries are also gearing up for the fight, including big businesses and insurance companies. But the stakes are especially high for drugmakers, which stand to lose as much as $30 billion in revenue if President-elect Barack Obama's plan to let the federal government negotiate Medicare drug prices is implemented, according to one independent report.

As with most things, this is about money. Though PhRMA's ads will tout the benefits of a "free market" health care reform, I'm glad reporting on the issue is getting to the real reasons behind these ads.

For the record, free market health care reform is something of a myth. John McCain ran on one of the most aggressive free market health care reform plans we've seen in recent years, and he was soundly defeated. And there's reason to believe the rules of the free market don't really even apply to health care, especially health insurance. Most people don't behave rationally when it comes to health care; they don't plan ahead for the care they are going to need, they have to be dragged into preventative medicine, and when crisis strikes, they understandably don't spend a lot of time shopping around for the best deal.

All PhRMA is doing here is putting their profits before the American people, and hiding it behind the old conservative canard called the free market. One might hope they'd realize that quality, affordable health care for all is a worthy goal worth supporting, even if their bottom line takes a hit, but somehow I think it's unlikely.

As such, expect a lot more from PhRMA, our friends at AHIP (who's been strangely silent lately), and a whole host of other industry front groups who stand to lose if health care reform passes.

There are a lot of reasons the free market doesn't really work when it comes to health care. Here's a biggie:

Striking new evidence has emerged of a widespread gap in the cost of health insurance, as women pay much more than men of the same age for individual insurance policies providing identical coverage, according to new data from insurance companies and online brokers.

Some insurance executives expressed surprise at the size and prevalence of the disparities, which can make a woman’s insurance cost hundreds of dollars a year more than a man’s. Women’s advocacy groups have raised concerns about the differences, and members of Congress have begun to question the justification for them.

The new findings, which are not easily explained away, come amid anxiety about the declining economy. More and more people are shopping for individual health insurance policies because they have lost jobs that provided coverage. Politicians of both parties have offered proposals that would expand the role of the individual market, giving people tax credits or other assistance to buy coverage on their own.

“Women often fare worse than men in the individual insurance market,” said Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee.

Insurers say they have a sound reason for charging different premiums: Women ages 19 to 55 tend to cost more than men because they typically use more health care, especially in the childbearing years.

But women still pay more than men for insurance that does not cover maternity care. In the individual market, maternity coverage may be offered as an optional benefit, or rider, for a hefty additional premium.

From a free market perspective, this makes sense, right? Women use more health care, so they get charged more for insurance. Supply and demand. Except that it's profoundly unequal and un-American.

America is great because we do believe in the free market as a force for good in society. By and large, we allow our businesses and our citizens to make their own economic decisions. But we also believe that people shouldn't be punished for the so-called accidents of their birth. Just because someone is born poor, a minority, or a woman doesn't mean they shouldn't have the same opportunities as privileged white males in our society. That's what equality in America is all about.

And so, we rightly recognize that sometimes, the free market works to promote inequality instead of right it, and in those cases, we recognize that limits and controls on the free market are necessary to preserve the greater good of equality. So, in American, we put human rights over profit making.

Or at least we should. Women should not have to pay more for health insurance simply because they are women. Equality demands that men and women pay similar amounts to preserve their health. And the same goes for low income folks and minorities.

Another admission from the McCain campaign that their health care plan is nothing more than a bunch of right-wing platitudes thrown together without any real serious thought as to how to solve the health care crisis. From CNN:

Changing the tax treatment wouldn't hurt the employer-sponsored system and would allow more of the uninsured to buy their own coverage, [the McCain campaign says]. Also, his advisers say a McCain administration would keep an eye on the credit to make sure it didn't lag behind the cost of coverage, while also working to lower the rate of medical inflation.

Younger, healthier workers likely wouldn't abandon their company-sponsored plans, said Douglas Holtz-Eakin, McCain's senior economic policy adviser.

"Why would they leave?" said Holtz-Eakin. "What they are getting from their employer is way better than what they could get with the credit."

Got that?

The entire premise of McCain's health care plan is that people can do better on the free market. That's why you get a tax credit. That's why you would be able to buy insurance across state lines. The market supposedly makes health insurance cheaper, makes your health insurance company offer better coverage, and makes buying the insurance you need easier. And things like tying health insurance to employment are anti-free market, which is why the McCain plan taxes employer health benefits to encourage people to get insurance on the individual, free-er market.

Of course, tying health care to employment is the way we've done things in America for generations, and it turns out it's also pretty popular. (Not to mention that insurance companies have to cover you through an employer health care plan, while they can deny you for pre-existing conditions on the individual market.) And so, in the face of political pressure, you have Douglas Holtz-Eakin admitting the truth.

Faced with the fact that destroying our employer-based health care system isn't exactly a priority for most Americans, he argues that the McCain plan wouldn't actually destroy the employer-based system. Why? Because the tax credit McCain is offering wouldn't buy a decent health care plan, even for the young and healthy!

Let's unpack this a little bit more. According to Holtz-Eakin, John McCain doesn't actually want to dismantle the employer-based health care system. But, McCain's plan would tax any health benefits you'd get through work. So, if Holtz-Eakin is right in saying you'd get better coverage through work than you'd get with the tax credit on the individual market (and he probably is), and if he's right in saying most workers won't drop their employer-based insurance for the individual market because they're getting a better deal at work, then John McCain is simply proposing a tax on your current health care benefits without giving you anything in return. That's the worst kind of tax increase.

Shorter Douglas Holtz-Eakin: John McCain's health care plan won't destroy the employer-based insurance system because McCain's plan doesn't work.

Remember John McCain: Less jobs, more war? Well now it's John McCain: More tax, less benefits.